I run XP pro and have NTFS partitions in all my rigs, never had any problems with running games, and I play alot of 'em..
Either one is fine, but NTFS is much better security wise, as far as there being any difference with the way games run...NONE from what I can see. Only downfall of NTFS that I personally can see is the inability to read the partition from regular dos ( in case of an emergency ) but then again, there are programs that allow dos based access to NTFS ( which is a "must have" if you keep important files on the disk and it refuses to boot).
Fat32 seems to get rather slow after a while, when you have a ton of stuff, the constant defragging and possible errors that can pop up on FAT32 drives me crazy. Also, when you have large partitions, the amount of wasted space because of cluster size is annoying, NTFS doesn't seem to have those problems.
There are a ton of reasons to either have one or the other...or not...I'm sure other people will be able to inform you of their personal likes/dislikes of one or the other.
For Windows XP NTFS is the prefered file format, but since it will run on both it really is up to the user to decide. Most people who dual boot Windows OS's usually use Fat32 so they can share files between XP/2k and 95/98/98SE/ME. What did you have in mind?
I use NTFS on the Windows/program partition on my drive and FAT32 on the rest of the partitions. I went with this because of the increased securtity that NTFS offers (though I haven't done enough digging to find the security options), and because I heard it fragments less easially (wich IMO it does, but not by much).
The data is on FAT32 because when my last computer died, we ended up buying a program (which only reads FAT32) to recover the hard drive contents since the FAT died on us, and so I figure I might as well keep my data on a partition that I can recover from since I was so crazy without it when my pooter died.
I like to use NTFS because of the added security. It is slightly slower but you only see it in benchmarks but asides from that I dont think you will be able to tell.
Something that I noticed when installing XP with SP1 integrated already, FAT32 is not available in the options when it comes time to partition & format the drives. You can still use FDisk to partition & format them before hand but sometimes XP doesnt recognize it & still forces you to use NTFS. This COULD be the reason for some SP1 headaches after the OS has been installed then updated with SP1.
Five partitions on two hard drives. Two of the partitions are formatted FAT32, and two are EXT3. I'm running Win98SE and Linux on this machine. Even if I were running XP, the two Windows partitions would be FAT32, since I want to be able to write to them under Linux. Microsoft hasn't released the specifications for NTFS, so write support for it under Linux is very limited.